Essay – ‘Liquidity’

LIQUIDITY

DrLukeHeslop, UniversityofEdinburgh

In 2007 the Intergovernmental Panel on Climate Change (IPCC) projected an increase in global sea level rise.[1] Absolute sea level rise of a few meters will put the low-lying islands of the Maldives archipelago under water. A scenario captured by former President Nasheed’s iconic and dystopic submarinal Cabinet Meeting.[2] But the millions of tons of reclaimed sand dredged from the bottom of the ocean and dumped on to the reef flats provides evidence to the contrary for many Maldivians, who have in fact witnessed their islands growing significantly in recent years.[3]

While the 2004 Tsunami was a shock for Maldivians that made them think seriously about the vulnerability of their islands,[4] gradual climate change related sea level rise does not alarm many island residents. And in the face of a visible increase in the terra part of their terra–aqueous nation, why should it?

Driving this project of mass reclamation is a financial infrastructure of Public-Private Partnership and a global liquidity surplus. Billions of US dollars circle the Asia region in search of commercially viable and bankable investment projects. Low bond yields make the cooler waters of Europe a less appealing prospect. This money is to be poured into the bridges, harbours, highways and power plants of Asia. These are thought to be the profitable destinations for money. In the words of Mark Delaney, Chief Investment Officer at AustralianSuper, during the recent Financing Infrastructure summit in Singapore, ‘give me a trans-shipment port over a Government Treasury Bill any day’.[5] This is infrastructure, not just as a public good backed by sovereign debt, but as an asset-class backed by multilateral guarantee facilities designed to draw investment from the private sector. This is infrastructure, funded in no small part by a flood of China’s US dollars. This is infrastructure financing that hoovers sand from the bottom of the ocean and redistributes it on the reef-flat producing ‘greenfield’ real-estate for commercial development.

The material consequences of the flows of mega-finance are brought to bear on existing infrastructure of coralline island ecology. Coralline islands are alive and dynamic. Between the north-east and the south-west monsoons, sediment is carried by the waters from one part of an island to another, exhibiting seasonal accretion and erosion. This change in shape is another reason many islanders cite for not being overly concerned about erosion, which they seldom connected with climate change related sea level rise. The beaches, fishermen say, have ‘dancing shorelines’ (nashamundha gondudho thakeh). For many, rainfall and changes to the monsoons are associated broadly with ‘climate change’, whereas beach erosion is explained by infrastructural development on the islands. People building their houses too close to the beach, the construction of asphalt roads that don’t allow for the absorption of rain water, jetties, piers, harbours, and groynes that effect the flow of water around the island; these factors are thought to contribute to the fluid structure of an islands and the dancing of the shorelines. Coral fringes beneath the surface of the ocean and acts as a natural barrier against beach erosion. As water levels rise, coral covered in reclaimed sediment will not keep pace and the structures themselves become less capable of dissipating the wave energy that relieves islands of their sand. In addition to causing suffocation and mortality in corals, sedimentation will decrease the resilience of coral reefs to climate change impacts like mass coral bleaching and ocean acidification. The built infrastructural interventions on the islands are at odds, it seems, with the infrastructure the island has built for itself.

Roads, houses, and harbours swirl in political currents. Master-Plans and manifestos are themselves fluid, and adapt between and within regimes. The ‘China-Maldives Friendship Bridge’, a politically engineered piece of connective-infrastructure, was adapted throughout numerous governments, shaped by the ebb and flow of global and regional political interest and alliance. A flood of liquidity in this instance has seen the creation of an entirely new island for the other end of the bridge to join.[6] The tides of high-finance and political currents can, of course, turn. Financing infrastructure may cease to be a priority, money for dredging may dry up, China’s ‘crunch point’ may come.[7] By this point the islands may have lost their structural resilience. In the end the sea will rise above everyone’s investments.

[3] The reclamation sites at Kulhudhufushi in the north, and G.A Villingili and Feydhoo, Seenu Atoll in the South are two good examples of this I have seen recently. Perhaps the starkest example is the construction of Hulhumalé on a reef flat in the Kaafu atoll near Malé. The construction of which required 6 million metric tons of sand for the first phase alone.

[4] Island fragility following the 2004 tsunami was largely cast in a narrative of pious Islamic fragility rather than a condition of ecological and environmental risk. Many attribute the tsunami to a rise in young women wearing the hijab in Maldives.

[5] World Bank-Singapore Infrastructure Finance Summit 2016. Organised by the World Bank Group, the Singapore Ministry of Finance, the Monetary Authority of Singapore and the Financial Times.

[6] Hulhumalé is a a 188-hectare artificial island constructed on the shallow reef flats of the Farukolhufushi lagoon 1.3 km off Male’s north east coast and north of the airport island, Hulhulé.